Buying a property in Melbourne? You could be in luck
Property buyers are always after trends in the market that allow for a bargain to be snapped up. Melbourne is currently proving to be an extremely effective buyer's market, and should be treated as such by investors and owner-occupiers wanting to get a foot into the region.
The Commonwealth Bank of Australia rates areas out of five based on their market positions – one is an extreme buyer's market, three is balanced and five is an extreme seller's market. As of October 2015, Victoria overall came in at four, but Melbourne specifically ranked as a five. This has led to a serious increase in available properties, and could leave the door open to anyone with a real desire to enter the growing market.
Putting yourself in the driver's seat
Melbourne is a market that is not only growing, but currently very easy to get into.
If you want to take control of your financial future then starting a property portfolio is a step in the right direction. We recently covered the best ways to turn the first page, along with all of the benefits that come with it, including setting yourself and your family up for a healthy retirement fund that keeps on giving.
Using the capital from an existing property, whether your own or your family's, will allow you access to the equity required to take out a mortgage which will then open the door to the world of property purchasing. For more experienced buyers, it's likely that you have some more capital to spend, and Melbourne is a market that is not only growing, but currently very easy to get into.
In the first weekend of March 2015, the Real Estate Institute of Victoria (REIV) recorded 318 auctions in the Garden State, with a success rate of 71 per cent. Over the same weekend of 2016, however, there were 1,217 auctions at a clearance rate of 74 per cent.
Recent trends have seen some suburbs around the country boasting 100 per cent clearance rates, and that is a highlight of a strong selling market right now. A seller's market shouldn't scare people away from investing, though. More homeowners are being encouraged by the state of play at the moment, in turn listing their homes because of the increased demand. For a buyer with capital to spend, that is great news – the options will only be increasing.
Taking on the trends
Suburbs such as Box Hill have recently seen major increases in median house values. Smart Property Investment lists this figure at $1,450,000, and that is projected to grow 93.29 per cent in the next three years, slowing to 72.62 per cent over five years.
Domain Group data from auctions on March 5, 2016 also show some interesting figures. A four-bedroom home in Box Hill sold at auction for $2 million, while a house with the same number of bedrooms sold in Box Hill North for only $1,230,000. With that in mind, the fact that a three-bedroom house in Box Hill North sold for more, at $1,535,000, is even more puzzling.
What can buyers take away from this information? Anything can happen at auction, all you have to do the research to ensure your moves will pay off, and be in the room.
With these high prices, it is interesting to note that the median house price around all of Melbourne saw a 0.1 per cent drop in the December quarter of 2015 to $718,000, as stated by REIV. Suburbs closer to the city suffered more than those on the outer ring, and these are among the fastest growing in the state.
"Melbourne's outer suburbs saw the strongest capital growth in the December quarter, up 2.9 per cent over September figures," said Enzo Raimondo, REIV CEO.
"This level of growth in areas that are traditionally seen as affordable suburbs indicates buyer demand for space and affordability. Improved infrastructure in the city's outer ring, including rail links and upgraded roads, are really boosting prices in these suburbs."
Making sense of the numbers
A specialist buyer's agent from Cohen Handler can help you to start your research on the right page. With industry experience and an invaluable knowledge base of the surrounding area, employing someone who knows exactly what to look out for and what to pay can save you money and time.
When taking on an auction room, it can also help to have a guiding voice by your side that will ensure you don't spend too much on a property that isn't worth it. After all, the end-goal for investors and owner-occupiers is to pay the right price (or less) for a property that they wish to purchase.
Talk to Cohen Handler, and see how the team can help you get to the top of the property ladder.